Is your New Year's resolution to start your own business? Five simple steps to put your dreams into action

Have you always dreamed of starting your own business? January is a time when many people take stock and think about what they want to achieve in the year ahead.

For some, this means finally taking the plunge and starting a company of their own.

Why? Because being your own boss has a lot of advantages - especially if you're working in a field you feel passionately about. And people often use the New Year to re-evaluate what's important.

One of the most valued perks is having control over your work-life balance, which many people don't feel they have in regular employment.

What's your New Year's Resolution? If it's to start your own business, help is at hand

For many people, the idea of starting a business is something they have toyed with, but they don't feel they have access to the funding, support and advice needed to make it a reality.

The 'fear factor' is a common barrier preventing people from driving what may seem like a pipe dream into a profitable business, so if you're thinking of taking the first step to becoming your own boss in the New Year, it's important to remember that you're not on your own - there's plenty of support out there.

Last January, the government-backed Start-Up Loans Company lent over £4.7million to 580 new business owners and were inundated with new enquiries - it's their busiest month of the year.

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HOW THIS IS MONEY CAN HELP

You might think you have a great idea, but take a step back and ask yourself 'what does my business do?'

It may seem obvious, but if you can outline your business in three clear points, then you have something to constantly refer back to. Write them on post-it notes and keep them on a wall in your kitchen, or somewhere that you walk past every day.

Remind yourself of your three points and if you ever feel like you are straying away from these three points, then you're moving away from your core business proposition. If that happens, you'll need to stop and go back to your original plan.

But don't be afraid to test out your proposition and tweak it if you need to. Try it out on your family and friends and ask them to be your toughest critics. If it's not working, refine it now, in the early stages.

New year, new you: If your ambition is to start a business, now is the time to take the plunge

Plan your route to market

Understanding your market is what's going to make you money. It's all well and good having a business idea and a solid proposition, but the next step is confirming there is a demand for what you are offering. Who is your audience?

Conducting market research will give you confirmation that people will buy your product or service, and how much they are willing to pay for it.

Friends and family can be a good sounding board in the first instance. But to get an objective perspective, use free tools like SurveyMonkey to poll people on questions relevant to your product.

You can share this through social media to cast your net wider. You could also attend a focus group and speak to your potential target market about what they want and need. If you're selling a product, you could also consider opening a pop-up store to trial selling it to the public.

Once you have this feedback, the most important thing is to take it on board and be adaptable. It may mean adjusting what you initially planned to offer, but it will be beneficial in the long run. Market research isn't just helpful at the very start - it will be crucial during your first 12 months of trading.

Cash is king: Understanding your finances is vital if you're going it alone in business

Understand your finances

Access to finance for start-ups can be challenging. It's perhaps the most daunting aspect of going it alone. Without a sizeable savings pot to tap into, most people need to look externally for funding. There are multiple options, whether it's financial support from friends and family, a bank loan, or a personal loan such as the ones offered by The Start Up Loans company.

The initial cash injection can help with set up costs, like materials, equipment or sales and marketing.

Cash is king when it comes to any business and getting a handle on your cashflow can be the make or break of even the best business idea.

While you need to start off with a healthy amount of cash in the bank, you'll also need to create a system of tracking what is coming in and going out.

It's important to know exactly how much you have going out of your business and how much you will need coming in to make a profit. Rely on a simple excel spreadsheet model and be honest with your skills in this area. If finances aren't your strong suit, seek help from people who understand it.

You should start by producing a sales forecast, which outlines how many units of product or service you will be selling every day, week and month. Then after working out all of your overheads, you should then be aware of how much you need to sell to make a profit.

Know your competition

You also need to know exactly what you are up against. Work out your unique selling point compared to what your competitors are offering in order to stand out from the crowd, or tap into a segment of the market which is calling out for something different.

Not only will knowing what your competitors are doing inform your product or service, but it will also help you to be targeted with your marketing.

Break your competition down into two groups. The first is direct competitors - those that are selling the same product or service as you. The second is indirect competitors who are selling a substitute or something similar to you. This is where you can find your niche, and will help to guide your strategy.

Get your legalities sorted out

It's important to have a plan in place to make sure your proposed business is compliant with relevant areas of the law.

Most start-ups are either as a sole trader or a limited company. The main distinction between the two is that as a sole trader you operate the business as an individual, while a limited company is treated as a separate legal entity. Make sure you explore both options so that you know exactly what is right for you and your business.

You also need to ensure you are savvy when it comes to protection. Seek guidance on things like business insurance and tax. If the paperwork seems daunting at first, there are support networks out there like the Citizens Advice Bureau and the Business Support Helpline, which can help demystify any legal jargon.

Tim Sawyer is chief executive officer of The Start Up Loans Company

'Starting a business was my last shot': Joe Davis on how launching his restaurant turned his life around

New start: Joe Davis (far right) started his restaurant after coming out of prison

Joe Davis, 59, started his restaurant Panama Joe's in 2016 after being released from Wandsworth Prison. He now employs two other members of staff, and has a projected turnover of £156,000 for his first year of trading.

He says 'I've spent time in prison and that gave me a lot of perspective. When I got out, I knew I wanted to turn my life around and realised that I didn't have a lot of options. Starting a business was something I'd considered and I knew that this might be my last shot to makes things work.'

Joe's Littlehampton-based restaurant serves Mexican, Panamanian and Caribbean dishes. He struggled to get traditional bank funding but eventually applied successfully for a £20,000 Start Up Loan, which he spent on initial rent and bill payments, kitchen units, re-plastering and painting.

He says: 'Cooking has always been a passion of mine. I'd worked as a chef previously and realised that this was something I could do on my own. I felt if I threw myself into something I love like great food and cooking, it would really help drive me to turn my life around.'

Joe says finally having his own venture 'gives him a new sense of purpose'.

'Everyone always says starting your own business is rewarding and satisfying, but I had no idea how true that would be. I just thought it was something people say. Now, I feel like I've left my old life behind me and I have a new lease of life.'

Be a part of StartUp 2017

On 14th January Enterprise Nation hosts StartUp 2017; the UK’s biggest StartUp show of the New Year. The event will be hosted in London, Birmingham and Bristol, connecting thousands of start-ups with successful entrepreneurs and practical experts.

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